Daily Stock Market Report (Wed 25 June 2025) - LIO, ULTP, FTC, BBSN/CAU

6:02am by Graham Neary

29 comments 3493 reads

Good morning!

The Agenda is complete.

Spreadsheet accompanying this report: link.

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Babcock International (LON:BAB) (£5.22bn)	Preliminary Results	Op profit +51% (£364m). £200m buyback. FY26: to hit adj. op margin 8% target one year early.
ITM Power (LON:ITM) (£478m)	Launch of Hydropulse	Launch of a German subsidiary that will build, own and operate hydrogen production plants.
Warehouse Reit (LON:WHR) (£454m) (also Tritax Big Box REIT (LON:BBOX) (£3.74bn))	Recommended Acquisition of Warehouse REIT	Price per WHR share: 0.4236 new BBOX shares and 47.2p cash. Total value: 111p plus dividends.	PINK
THG (LON:THG) (£406.8m)	AGM Trading Statement	Q2 much improved, as anticipated. Return to constant currency growth. Unch. FY25 guidance.
Halfords (LON:HFD) (£376m)	Preliminary Results	Adj. PBT +6.4% (£38.4m). Early FY26 trading in line. Remain cautious on consumer spending.
Filtronic (LON:FTC) (£339m)	Year End Trading Update	Rev, EBITDA marginally ahead. Rev +120% (£56m). Strong position to meet FY26 exps. Forecasts at Cavendish for the current year (FY May 2026) are unchanged and suggest a small reduction in revenues (from £55m to £54m) and a larger percentage drop in adj. PBT (from £14.1m to £8.3m). These FY26 forecasts are still far ahead of FY24 performance, even if they don’t match FY25. We do not yet have forecasts for the following year.	AMBER/GREEN (Graham) [no section below] I can leave our AMBER/GREEN stance unchanged here after this update, given the strong momentum, while acknowledging that I don’t think that prospective earnings are currently able to justify the market cap. This is a “High Flyer” (strong quality, strong momentum) and I note that momentum has recently weakened - this is one where I’d see scope for a pretty large correction, if sentiment changes, given the lack of fundamental support. But for now the trend is intact.
Liontrust Asset Management (LON:LIO) (£262m)	Annual Financial Report	Adj. PBT £48.3m (LY: £67.4m). Capital Allocation Policy (only 50% of EPS to be paid as a minimum).	AMBER/GREEN (Graham) Keeping a moderately positive stance on this due to its sheer cheapness, but there are still serious problems. Other fund manager stocks remain significantly more appealing than this one.
Hargreaves Services (LON:HSP) (£224m)	Pre-Close Trading Update	Revenue and PBT to be ahead of exps. Services Division: future years to also beat current exps.
Vertu Motors (LON:VTU)…

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Silver Moon

8:34am

I guess we won't be buying any shares now untill the morning of the trading statement and even going so far as to sell the day before it.

Rare Bird

8:43am

It’s recovered a bit since the bell, but still seems somewhat overdone, given a 12.5% profit miss and a lot of potential downside already priced in. Possibly private investors losing patience.

intuitive6191

8:44am

Re ULTP

I think that the share price reaction is because it appears to be broadly the same reason for the profit warning as the last time - customers deferring orders. There will be some concern that more deferrals are not one offs but a new normal level of trading for the company.

The company has spent quite a bit of effort re-branding the products, which might be a redesigned product in a new box. This is fine if this has been identified as the best way to increase sales. In a premium brand, presentation is very important, in a budget brand, it is probably more the cost of the product. This strategy needs more explanation.

I would guess that ULTPs main problem is that it is being squeezed by other budget brands and aggressive pricing of the likes of Curry's who will be offering better brands.

Be interesting the see the read across here to the retailers that ULTP supply. I would guess that some of these are also finding it tough at the moment.

I see that the company has scheduled an investor webinar. I saw the one of previous webinars and thought it it could be improved. It was a bit wordy, and in my view lacked the key answers for investors.

I don't hold but ULTP is one of the shares that keep in view to get a feel for the retail environment.

donald pond

8:45am

Filtronic (LON:FTC) serially under promise and over deliver. The brief Cavendish note today sums it up. They say they expect "strong revenue growth over the next 2-5 years" but also leave the 26 forecast unchanged, so are actually forecasting revenues to decline next year. I suspect we will see multiple trading ahead statements over the next 12 months.

djlcollinge

8:53am

I bought a small number of shares recently on the rationale that sales growth would increase albeit modestly in 2025 and 2026 - a contrarian approach. I actually thought the brands would be reasonably defensive given their prevalence in dollar type stores. A warning sign for the macro economy. Quality metrics are good but of no use if the top line has stalled. I will await graham's comment but I may bail out. Analysts remain quite positive strangely.

8:55am

A lot of their brands are located in discount stores so a worrying signpost for the retail environment.

Bouden54

8:56am

Yes but forecasts for next year have been slashed from 12.4p to 5.2p (looking a the Canacord note) - that's the worrying thing and the reason I got out first thing - thankfully only a small position!

9:06am

Yes, they supply some of discounters. With the last profit warning, I speculated that there might some read across to B&M. Though it has to be said that B&M seem to be stocking more products from other suppliers.

I don't think that they supply Home Bargains who have in the last year increased their electricals range via Pifco. I don't know for sure, but I suspect that HB might have some connection with the Pifco brand?

9:10am

One of the comments was consumers were switching to even more discounted brands. Analysts seem quite positive long term.

Mark L.

9:22am

How to interpret Liontrust Asset Management (LON:LIO) new capital allocation policy announced today. They say they will distribute at least 50% of EPS as dividends and return further suplus as share buy backs.

Should it be read as a gentle introduction to a pending dividend cut? The enormous historic yield (17% plus) flags that the markets beleive this to be a sure fire case. On the other hand, share repurchases might be suggesting that the directors see the current share price is a bargain.

Not sure if today's RNS is overall positive or negative!

10:00am

Me too, that's what I did, having sold my previous holding on a peak.

doctor dave

10:15am

Bizarrely up 4% shortly after opening, now down 5% on the opening price. Yet the report suggests they're ahead and making good progress.

jonestheinvestor

10:38am

I think the biggest problem is that they stated in the interims that things were getting better and they'd hit forecast. They obviously didn't, and it's as much now a confidence in management issue as the actual reduction. On value grounds it still looks relatively ok, so I'm keeping my small holding, but certainly not buying any more until there are signs of recovery.

Revs8

10:43am

Who?

10:47am

I thought amber/greens a bit generous for Liontrust Asset Management (LON:LIO) - still seeing huge outflows, funds performing poorly and not that cheap on downgrades EPS figures. I personally wouldn't value fund managers with reference to AUM as it doesn't factor in the margins of that AUM (eg if a fund manager has low fees and/or high running costs then it won't necessarily deliver much profit).

timarr

11:22am

Liontrust Asset Management (LON:LIO)
I personally wouldn't value fund managers with reference to AUM as it doesn't factor in the margins of that AUM (eg if a fund manager has low fees and/or high running costs then it won't necessarily deliver much profit).

At this point the question is perhaps whether someone else fancies they can do a better job than the existing management. Take over the funds, ditch the management, all of the backroom staff and technology ... sadly there's probably not much in the way of brand equity here.

timarr

Equity Development

11:35am

Hi all - lots of chat on Ultimate Products today - for those interested, check out the Equity Development website for a new (freely accessible) research report with new forecasts that came out pre-market open this morning.

We are also hosting a webinar with management this 2.30pm with live Q&A if you'd like to register to attend - all are welcome!

11:52am

The problem is that AUM can disappear very quickly, especially if the managers get taken over and replaced by a new team - so from a buyer's perspective you're not buying anything tangible that has permanent value.

12:18pm

RE: Liontrust Asset Management (LON:LIO)

Hostile takeovers in the fund management industry aren't common because of the reason you've given - however, given the dire performance I very much doubt there are many investors who are with LIO because of their management teams. Inertia is the most likely factor, and someone with a better track record (which is - frankly - anyone) might well be attractive to that particular demographic.

The UK fund management sector is full of cheap companies, and the most likely time for M&A is as the market recovers but before that's reflected in fund figures. So if it's going to happen it will likely be soon.

Tortoise investor

12:26pm

'It's still a pretty good company'.

I am less sure. Because:

* It's basically a marketing business given they just source products and stick a name and branding on them. The brand names like Salter are doing a lot of heavy lifting. And, as someone working in marketing, I am not convinced the recent marketing rebrands are particularly inspiring or clear in who they're trying to target either e.g.: https://beldray.com/?srsltid=A...

* Anyone with a Which? subscription should check out the product reviews. I place more weight on Which? reviews as they're independent (they don't get sent products from manufacturers) and thorough versus user-led Amazon reviews. E.g. a couple of Beldray vacuums are described as 'don't buys' with Which? noting model BEL0776PURWK is 'dreadful' at cleaning. The BEL01982 iron is described as 'bog standard' and 'slippery' which could be a problem. My favourite: the Retro 4-EK5739PNK family toaster doesn't fit medium sized bread (oops).

* Several other consumer companies over the last few months are reporting revenue steadying or improving now. Why not Ultimate Products (LON:ULTP)?

* It's occupying the cheaper end of the spectrum. If their products aren't particularly innovative, or well rated, then it just risks getting undercut on price by e.g. Temu. I am starting to wonder if it's about to become the latest victim of Chinese direct-to-consumer companies?

On the plus side it's still making some profit rather than losses, and the business model allows it to quickly adapt to trends and source products to take advantage of booms in e.g. air fryers. I did hold a small portion of shares this morning for those reasons and for the potential upside. However, after today's update I've sold out and will sit on the sidelines until there's clearer evidence of a turnaround and in case there's something fundamentally wrong with the company.

Even the CFO isn't feeling particularly inspired! ' on 25 June 2025, Chris Dent, Chief Financial Officer, purchased 1,992 ordinary shares of 0.25p each ("Ordinary Shares") in the Company at a price of 50.1778 pence per Ordinary Share'

Daily Stock Market Report (Wed 25 June 2025) - LIO, ULTP, FTC, BBSN/CAU

Companies Reporting

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Graham Neary

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